Proposed insurance legislation is important issue

Alex RoseMidland Reporter-Telegram

Published 7:00 pm, Monday, June 29, 2009

By Alex Rose

AARP shares the Obama administration's goals of coverage for the uninsured, reducing costs in the system and changing payment mechanisms so doctors and hospitals are rewarded for the quality of care they provide rather than the quantity of patients they see.

It is important that everyone understands the terms that are being used.

Universal health insurance refers to the goal of ensuring that every American has access to health coverage, regardless of the specific system used to achieve it, according to the June issue of the AARP Bulletin.

Group health insurance is the traditional system in which employers or unions offer subsidized private insurance to employees or members and their dependents at discounted group rates. Individual health insurance is a private policy purchased by individuals or families. Applicants may be denied coverage or have to pay more because of age, gender or pre-existing medical conditions.

Public health insurance includes Medicare, Medicaid, SCHIP, the Veterans Affairs health system and some state programs. Care is subsidized by federal or state governments or both.

Single payer is a centralized system used by several Western nations in which the government pays for every resident's health care as a basic social service, funded out of taxes.

Socialized medicine is a single-payer system in which the government owns and runs health-care facilities and pays salaries to doctors. In the United States, the VA program would fit into this category.

Obama has vowed to have health-care reform enacted as a priority by the end of the year. Large questions loom. Should all Americans be required to have insurance? Should all employers provide it? Should an optional government-run plan be allowed to compete with private health plans?

The real debate begins when there is legislation on the table, there is a price tag attached and how it will be paid for is cited.

There is much discord already over one of Obama's plans called the "public plan." This would be a government-run health plan - maybe something like Medicare -offered as a competitive alternative to private insurance. In theory, the public plan - with fewer administrative costs - would have no need to make a profit, and could provide an affordable option, especially for people currently without insurance, accordihng to the bulletin. A public plan would provide a safety net for people without insurance, without threatening the employer-based coverage most Americans still rely on.

This idea has ignited discussions on just what is the role of the government in health care. Some say that if the public plan sets premiums and provider payments low the private market could be wiped out. Some in Congress say that this plan is the first step toward a national single-payer system.

Meanwhile, other ideas for reform are being hashed out. The insurance industry supports the idea that everyone should be required to have health-care coverage. They are willing to give up "medical underwriting" - the practice of insurers denying coverage or charging higher rates to people with pre-existing conditions. Requiring employers to provide insurance for workers or to pay into a system that would cover the uninsured is meeting resistance from business groups.

There is talk of a kind of insurance clearinghouse that consumers could use to sift through a menu of private health plans (plus a public plan if one is included.) Another system of subsidies that help lower- and middle- income people afford insurance is needed. Placing a cap on out-of-pocket expenses, such as a percentage of income, is one idea for achieving that. Expanding Medicare and Medicaid to cover more people is another.

Everyone agrees that health-care reform needs to change but the challenge is how do we pay for health coverage for the approximately 47 million Americans who cannot afford to pay.

Please do your homework and keep in touch with what is happening in Washington in the next few weeks. Let your representative know how you feel about the proposed legislations.